In my recent post, regarding the two homes in Saugus, I mentioned that both homes did not have any Mello Roos. The question was asked to me, “…What are Mello Roos?” Forgetting that readers across the country may not know what this is, I did not take the time to explain.
Mello Roos are special assement taxes, usually found in newer neighborhoods. Where I live, Santa Clarita, they are very common, largely because there is a significant amount of new housing here. In the San Fernando Valley, they don’t exist, because The Valley is already established with neighborhoods such as Studio City, Sherman Oaks and North Hollywood.
In California, Prop 13 dictates, property taxes are based on 1% of the purchase price of your home. Then each county charges their own additional tax to be tagged on to that 1%. In Los Angeles County that roughly works out to be ¼ % extra. However, if you are shopping for a new house in Valencia or Westridge (both neighborhoods in Santa Clarita), a Mello Roos tax is added on to the 1.25%. The Mello Roos is usually a school and/or police bond that the builder did not pay off and is passing that cost onto the homebuyer. That bond usually lasts for about 20-30 years, or until it are paid off. For example, a large luxury newer home in the master planned community, Tesoro del Velle, will cost approx. $950,000. The base property tax, plus the Mello Roos works out to be about 1.7%, that equals to about $16,000 per year.
Now historically, it has been proven in areas with a Mello Roos tax, these neighborhoods are most desirable. They have the lowest crime rate and the best schools. Santa Clarita is not the only city that has them. Many cities in Orange County, San Diego and Palm Springs have Mello Roos. No one likes to pay them, but they produce good quality neighborhoods.
United States
Canada